The winner of the most absurd PLA-related quote of the week goes to a local official in Monroe, MI. The Monroe City Council was forced to accept a bid on a water main repair and rehabilitation project that was 12.7 percent or approximately $200,000 higher than the engineer’s estimate because it was the only bid submitted for the project. In a state like Michigan, where the economic situation is especially dire, you would think there would be plenty of bidders looking for work. Unfortunately, Monroe requires contractors to utilize labor harmony agreements (a project labor agreement by another name) on city construction.
City staff recognized that these agreements limit the number of bidders and increase construction costs. Here is an excerpt from the Monroe News:
Because the project was so specialized, city staff had recommended in February that the Labor Harmony policy be waived for the water main project, fearing the requirement would limit the number of bidders and result in higher costs.
Staff asked that contractors only be required to pay prevailing wages rather than form a project labor agreement with local unions. But the city council voted 5-2 against the recommendation. Councilmen Beneteau and Edward Paisley supported waiving the Labor Harmony Agreement for the project.
Despite the fact that the project’s only bid was nearly 13 percent higher than the engineer’s estimate, the county’s Director of Water and Wastewater Utilities had the audacity to tell the Monroe News the following:
However, city officials say they actually will come out ahead of their budget projections for the entire project because of American Recovery & Reinvestment [ARRA – the stimulus bill] money, as well as the State Drinking Water Revolving Fund.
Barry LaRoy, Director of Water and Wastewater Utilities, said the federal and state money will take off $2 million — or about 40 percent — of the $5.1 million project cost. “It’s a good savings for the community as far as keeping costs down,” he said.
Essentially, Mr. LaRoy is saying that despite $200,000 in waste, the city and its residents came out ahead because the federal and state governments are picking up 40 percent of the project’s tab. This is a ridiculous statement. Mr. LaRoy doesn’t understand that Monroe residents, as federal and state taxpayers, are also funding 40 percent of the project via the American Recovery & Reinvestment Act money and Michigan’s State Drinking Water Revolving Fund.
Despite what Monroe city officials are telling the media, most are not acting as good stewards of taxpayer money just because the city is spending less money. Monroe officials must spend federal and state grants responsibly as well and $200,000 in waste on a special interest giveaway is not responsible.
Kudos to Councilman Brian Beneteau for recognizing the problem with wasting taxpayer dollars on giveaways to Big Labor and warning how it will harm local residents:
“Not only are City of Monroe residents going to incur higher water rates, but also anyone who uses our city water from Monroe Township to Dundee.”
It is also worth noting that this project labor agreement is made possible by President Obama’s Executive Order 13502. In addition to encouraging PLAs on federal construction over $25 million, Obama’s order repealed Executive Order 13202’s prohibition of PLAs on projects receiving federal funds. This project is a great example of waste that Executive Order 13202 was issued to prevent and limit.
If local officials and voters don’t think that President Obama’s payoff to special interests in Executive Order 13502 will impact their local and state budgets, they need to change their understanding of this issue and encourage the OMB Director and Secretary of Labor to refrain from expanding Executive Order 13502 to state and local construction projects receiving federal assistance (i.e., grants, tax breaks, loans) via Section 7 of the order.